Heading towards a New Cold War, by Jose León-Manríquez and Luis F. Alvarez

In a paper published in Revista Brasileira de Política Internacional, two Mexican researchers evaluate the impact of China’s inroads in Latin America within the broader framework of Sino-U.S relations. Contrary to what could be expected given the United States’ historical hegemony over Latin America, growing Chinese influence in this region has not led, thus far, to an open regional dispute between these great powers. Unlike the Soviet Union in the 1970s and Japan in the 1980s, Chinese presence in Latin America has not provoked a particularly defensive response of the U.S.

The paper briefly analyzes the United States’ historical influence in Latin America and its policy for the region in the Post-Cold War. The authors argue that, in the 1990s, Washington’s policy for Latin America shifted from security to democracy and free markets. One of the main regional goals of the U.S. was the creation of the Free Trade Area of the Americas (FTAA). The winds for this overarching project seemed favorable as long as most Latin American countries were implementing neoliberal economic policies under the “Washington Consensus”. Nevertheless, the FTAA had aborted by the mid-2000s. Five reasons explain this outcome: the U.S. neglected Latin America and put its attention in the Middle East after 09/11; a reinvigorated left took office in several South American countries; alternative economic policies put into question many tenets of the Washington Consensus; Latin American economic growth resumed after two decades of stagnation, and China quickly became an influential economic partner for Latin America. Despite all of these challenges, the U.S. policy towards Latin America is still stuck in the post-Cold War discuourse.

The second section of the paper studies China’s recent economic inroads into Latin America and explains its growing leverage, especially from a trade perspective. While Chinese trade with Latin America was frankly marginal in the 1990s, it boosted significantly since 2000. The vast majority of Latin American countries have swiftly increased their trade links with the PRC. China has become either the first, second or third trading partner of all Latin American countries. The authors stress that the implications of increasing Chinese competitiveness for Latin America are far from homogeneous. On the one hand, commodity producers in South America have been favored by China’s need for oil, minerals and food in quantities that exceed its internal production capacity. On the other hand, Mexico and Central America’s manufacturing exports have collided with Chinese competition both in their own markets and in the U.S. Regardless the current position of different Latin American countries, the authors warn that, due to the increasing technological complexity of Chinese manufacturing exports, in the middle-run most of the region could run trade deficits with China.

The last part of the paper discusses the significance of Latin America in the broader context of the Sino-U.S. bilateral agenda. The authors state that, given the historic trends and the sudden appearance of China in the United States’ “backyard”, Washington response has been generally sanguine in comparison to previous incursions of foreign powers in Latin America. Within the U.S, reactions on Chinese engagement upon the region have been divided in at least two groups. The soft-liners are integrated by the Presidency, the Department of State, and liberal lawmakers and scholars. Predictably, hard-liners include certain sectors of the Department of Defense and Congress, conservative scholars, and some of the usually fear-mongering think tanks. While tough positions may have advanced, liberal positions still have the upper hand. The authors posit that this U.S. “coolness” has to do with the fact that Latin America is a low priority in the Sino-U.S. bilateral relation. Such issues as the U.S. trade deficit with the PRC, Chinese increasing military expenditure and differences in regional conflicts (Iran, Iraq, North Korea) are more salient in the bilateral agenda. Neither Washington nor Beijing are eager to further stress their relations because of Latin America. This does not mean that a hegemonic struggle is altogether discarded in the future.